The Goldman Sachs Group, Inc. (GS) Earnings Call Transcript & Summary

[Audio Gap] analyst at Wolfe Research. I'm very pleased to introduce our next presenter, a man, who really needs no introduction, but we're going to give him one anyway. John Waldron, President and COO of Goldman Sachs. John has been with Goldman for more than 2 decades, serving as President and COO, since 2018. And prior to becoming COO, John wasn't President. John was Co-Head of Investment Banking Division. So welcome, John, and thank you for joining us this morning.

Thank you, Steve. I appreciate the opportunity to be with everybody virtually.

So before we kick off the fireside chat with John, just a quick reminder for all of you on the webcast. You can submit your questions by the text box on your screen. Those submissions will remain anonymous, and we'll try and leave room for Q&A towards the end of the presentation.

And so John, since this is a fintech forum, I wanted to kick things off by just asking on your firm's philosophy around technology and digital investing. How is that translating to some better outcomes, both in terms of market share gain as well as efficiency progress that you guys are seeing?

Okay. All right. So Steve, I would just start by harkening back to our Investor Day -- our initial Investor Day in 2020, which was pre-pandemic, just shortly before the pandemic. So late January of 2020, where we spoke about 3 primary pillars of our strategy, which I'll go through here in a second. But underlying all 3 of the pillars were really 3 elements. One was engineering capability, knowledge and capability; two was people and human talent; and three was brand, that were kind of running across the whole strategy of the 3 major pillars. And so the 3 major pillars are strengthening our core franchises, diversifying into new growth initiatives and operating the firm more efficiently. Those are the 3 simple pillars that we talked about. And in all 3 of those pillars, we really are deploying technology capability, engineering capability, and human capital to complement that capability, with hopefully some real innovation in the context of how we're trying to deliver that. So in the core, for instance, Marquee, which many of you may know, or if you don't know, I can explain quickly, which is really effectively a digital platform for how we interact with our institutional clients, so big asset managers, hedge funds, insurance companies, et cetera. It will be a portal or is a portal for how those clients engage with us digitally. That would include our putting risk analytics and other important things that we can offer to our clients from a risk standpoint, up in a platform digitally that clients can play with and work with and utilize. So tools that they can utilize that are the very same tools we would utilize to manage our own risk, content, video content, written content, and ultimately, execution capabilities so you can execute on the platform. That's a technology platform really built fit-for-purpose for institutional clients. Similarly, we have a project we call Atlas in the firm, which is an execution platform in equities, focused on driving faster, more scalable electronic execution of equities on a global basis, and really trying to almost leapfrog what's in existence today and build a faster, more scalable platform. Another example in the core equities execution business of using technology and trying to innovate and move the ball down the field. In areas in banking and Asset Management, which are core areas of the firm, we're trying to use data science more as we think about how we're serving our clients, how we're aggregating that and how we're using that data more intelligently to serve our client franchise. So in the core, there's a number of things that we're doing. And then if you look at the 4 primary growth initiatives that we talked about: third-party alternatives, transaction banking, Consumer & Wealth Management. In all 4 of those, we are building platforms and utilizing technology to drive those strategies. So transaction banking and Consumer are actually new build technology platforms. That's what underpins the entirety of those business strategies. So in transaction banking, we're trying to build a new age digital platform to process corporate payments around the world. There's obviously a big legacy business, and we'll talk, I guess, more about that today. There's a big legacy business in place. We're trying to build a newer, more modern platform to attack that opportunity. Similarly, in Consumer, we're building a digital bank from scratch. It's a platform build again. That underpins the entirety of the business strategy. The digital card -- credit card that we're doing with Apple would be a really good example of standing up a digital platform that's -- and taking a lot of engineering capability and innovation in terms of standing up an entirely digital platform from a credit card standpoint. And in wealth management, we're trying to build an integrated end-to-end capability from ultra-high net worth down through mass affluent. And as you go down that stack, you end up with less human capital, human advice and more digital advice. And so there's a blend of human and digital in the context of that advice, and so that's obviously an important element for us as well. And then the third pillar is operating efficiently. And operating efficiently encompasses a number of elements, but one major element that I think, over the long run, will be the biggest unlocking of efficiency in the firm is using automation. So we're obviously looking at our pyramid. We're looking at our location strategy, all things that you would expect us to be looking at, but the big unlock is using automation and building centralized platforms and taking some of the human intervention and some of these processes out and replacing it with more automated intervention. So the processes run smoother, cleaner, easier and more efficiently. We have a number of KPIs we're using to monitor the progress we're making in that regard, around our client franchise, around risk, around productivity, more specifically. An example would be automating our client onboarding. So we obviously onboard a lot of clients in various parts of the firm. In our Global Markets business, where we have a lot of risk intermediation and financing activity with institutional clients. In the fourth quarter of 2020, we onboarded 75% of those clients the same day, which sounds like we should always be doing that, but you'd be surprised at how long some of that onboarding processes can take from a human standpoint. The 75% is compared to what would have been 35% in the first quarter of 2020. So we made meaningful progress over the course of the year, and we're working on utilizing data science in big parts of the business to continue to try to reduce the manual workflows and use more data and more automation across the firm. So we're excited about those opportunities.

Those are some really interesting stats, John. And maybe just focusing in on some of the platforms that you have built from scratch. So you talked about transaction banking and Consumer. As part of the evolving strategy, you've identified those large TAMs as areas really ripe for digital disruption. Speak to how those businesses are performing relative to your initial expectations? And maybe just because of the early success that you've had, are there other new frontiers that you might be interested in pursuing now that you have some sort of playbook that you can follow?

Okay. Well, I appreciate the question. I mean we're really encouraged by the progress we're making in Consumer and transaction banking as 2 of those 4 key diversifying growth opportunities for the firm. Both, as you said, large TAMs where Goldman Sachs really hasn't had any historical position or any business strategy to approach those TAMs, fragmented markets. So it's not as if there's dominant players in these markets. They're pretty fragmented. There are some scale players, but there's plenty to play for. And we think there are areas where technology and innovation can really start to disrupt the existing models. And so we think it's right for the kind of combination of skills that we bring to the table. So in Consumer, as I said, we're building what we hope to be a real digital consumer bank. So a platform that has a broad base of products and capabilities, not a single product or 2 products, but something where you're in an ecosystem where you can do multiple things in a valuable way to make your life better. In a short period of time, we're at approximately $100 billion of deposits -- a little shy of $100 billion of deposits. We grew that deposit base by $37 billion in 2020. So obviously, the pandemic was helpful. There was more money in motion. There was more digital commerce going on over the course of 2020, and we benefited from that because we had an all-digital platform. We have $8 billion in loans and card balances. So we've built a pretty good-sized asset base on the asset side. We've got greater than $1 billion of revenues in 2020. And obviously, that continues to grow into 2021. We've launched something called Marcus Invest, which is our first wealth and investment platform, into that Marcus customer base. And we're launching later this year, digital checking. So you can do your checking activities in an all digital manner, again, to complement some of the other products and offerings we have across this broader digital suite. And we've signed 4 partnerships in 2020 to broaden our platform and to get ourselves positioned into other people's ecosystems, which is an important component of driving this customer acquisition strategy deeper into other people's ecosystems as opposed to relying only on our own capabilities. And in 2021, we're launching the GM credit card. So we will now have 2 credit card partnerships and platforms. One with Apple, as I said, that we launched in 2019, and 1 in -- with GM in 2021. So we'll now have 2 credit card platforms. Similarly, in transaction banking, we've made great progress in terms of deposit growth, aggregating clients on the platform and establishing partnerships, not unlike what we're doing in Consumer. So in transaction banking, we're now at north of $30 billion of deposits. We had said that our target -- at the Investor Day, we had said that our target was $50 billion in deposits over 5 years. So we're well on our way, obviously, to doing very, very well in the context of that target. We had, at the end of last year, at the end of 2020, about 225 clients on the platform. We generated $135 million in revenues on the platform. We talked about $1 billion of revenues as our target over 5 years, back in the beginning of 2020. So we generated $135 million in the first year, really a little less than the first year, because we didn't really launch the platform until the spring. And similar to Consumer, we've now got 4 partnerships that we've signed across the transaction banking platform, which we're really excited about, to broaden our aperture and again, grow into other people's ecosystems. And we feel really good about how the platform is performing. So we processed trillions of dollars of payments over the course of 2020. We had 99.5% of those payments running straight-through processing, really fully electronic in the fourth quarter of 2020. And the cloud platform was basically running at 99.9% uptime in the fourth quarter of 2020. So we feel good that the platform is running at a robust, scalable way, which obviously is what we promised our clients we would be able to do.

That's great. And John, I just want to spend some time talking about the Consumer & Wealth strategy. You had talked about Marcus Invest, it was just launched. How does that offering compared to some of the other automated advice offerings that are in the marketplace, just in terms of both the pricing as well as the product suite? And maybe over the long term, how are you thinking about the asset capture opportunity for Goldman within that channel?

Sure. So we're really excited about Marcus Invest. Marcus Invest to us is the first time we're really trying to integrate what we've built in Marcus on that consumer platform and what we have at Goldman Sachs that is available to our Consumer clients. So we obviously have a long track record at Goldman Sachs of being an investor and a steward of clients' capital. That client capital has been institutional client capital and ultra-high net worth private wealth client capital. And now for the first time, we're making that capability available to our Consumer clients through the Marcus platform. So we believe our Marcus clients want this capability. They are coming to Goldman Sachs, broadly speaking, to have capabilities like this. And so we think we're meeting a real customer need. And we think it's going to be a very important component of that broad suite of offerings. And again, we're blending what we think is our technology capability and our platform and our user interface that we're proud of what we've built with more traditional Goldman Sachs, legacy investment capability. So it's a marrying of kind of the new and maybe you'd say the old. But that combination, we think, is pretty compelling in the context of what's available in the outside world. Our portfolios are the same portfolios that we model and look at for institutional clients. So we have an investment strategy group that thinks about portfolio allocation all day every day, and we're using that same capability to design the products that we're offering for our Marcus customers. And the pacing is pretty simple and pretty transparent, which is an important theme that we want to bring to all the things that we're doing digitally, which is very simple, very transparent, very easy to understand, fully disclosed. So we've got a 35 basis point simple fee model for these investment products. And the products include ETFs. They include smart beta products. They include an ESG component, so you can have an ESG friendly product. Again, simple, easy, 35 basis point fee. And I'd say with a long term orientation. So it's an investing for the long term. It's not meant to be, let's try to make a lot of money in the short-term in the equity markets. It's much more long-term oriented around the way we would condition and counsel our institutional clients. And we'll continue to add strategies and try to develop the app integration over time to continue to improve upon the capability. And we're not going to commit to a certain amount of asset capture, but we think that there's a tremendous opportunity to offer an attractive product and to really start to manage more of the wealth of the broad mass affluent customer base as we continue to build our platform digitally.

John, something you touched on, and actually, I believe Stephen also alluded to this yesterday, is how Marcus has really evolved from a product-focused offering to something much broader, more holistic consumer wealth offering. And if Marcus Invest scales successfully, I know you talked it -- referred, alluded to the longer-term orientation, but would it make sense to maybe expand the product offering into other areas, such as self-direct trading if you have significant onboarding success within Marcus Invest just to widen the platform offering a bit more?

It's a good question. And obviously, you're hearing us talk about this as a platform, multiple products, multiple capabilities, building it over time and adding features and offerings that maximize what Goldman Sachs brings to the table. So we're clearly going to be doing more things over time. I want to be careful, and we all want to be careful to overpromising and doing too much, too fast because we're not doing this for a quick set of victories or launch a lot of products and just make sure that they really succeed. So we're -- we have a lot that we're doing. Marcus Invest is really important. The digital checking platform is really important. The credit card partnerships are really important, and we have to execute those at the highest possible level. And as the Chief Operating Officer of the firm, I feel quite strongly that executing at a really high level is one of the reasons we will continue to attract partnership opportunities from our clients because they know that we're putting a lot of muscle behind it, and we're taking our time and doing it right. And we're not cutting corners, and we're not trying to do things fast to meet a sort of imminent market need. So I think the opportunity to allow people to trade and do other things, mortgages, other opportunities over time are certainly prospective potential opportunities for us. But we're talking now about Marcus Invest in digital checking, plus our credit card partnerships, as kind of what's on the table and what we're really focused on executing in front of us right now.

Fair enough. You certainly have quite a bit on your plate at the moment. So I could certainly appreciate that. Thinking about Marcus' growth and some of the KPIs that you cited, $100 billion of retail deposits added over 5 short years, that growth has only accelerated of late. We have a number of challenger banks that are actually participating in the conference today, have also seen tremendous growth. How do you differentiate the Marcus offering versus some of the other challenger banks? And how does your growth compare with some of those other firms that have started to enter that space?

Sure. I mean, as you know, we're a large player in the financial technology arena across multiple dimensions, including as an adviser and financier. And we have tremendous respect for the innovation that's going on in that arena, and we believe a lot of the challenger banks have tremendous opportunities in front of them and have done great things. So we don't view this as an either/or or zero sum, we think there will be success in a lot of places. And a number of those challenger banks are good clients of the firm, and we intend to support and help them. Having said that, from our standpoint, what we're doing is, as I said, trying to blend our Goldman Sachs capabilities and attributes with new innovation and technology capabilities. And we think we're somewhat unique, maybe not completely unique, but somewhat unique in the ability to do those 2 things. So challenger banks typically will be very technology-led, maybe more narrowly focused on a single product as they're launching and building their initial foray into the marketplace. And what we're trying to do is take advantage of the fact that we actually have a big balance sheet. We have a lot of attributes that we can bring to the table. We can launch multiple things over a reasonably short period of time, and we can blend Goldman Sachs' balance sheet, Goldman Sachs' brand, Goldman Sachs' risk management capabilities with the innovation and technology build that we think we can bring to the table. We don't have that market cornered, but we have a lot of that capability. And we think the combination of those attributes is unique. So I'd say our differentiation is really combining all those things into one package and delivering really capable products and services that make consumers want to be attractive to the platform. And we have grown. From a standing start 4.5 years ago, we are now at a north of $1 billion of revenues. We are at 6 million customers. We are at $100 million roughly deposits, $8 billion of balances, as I said, 2 branded credit cards. From a standing start 4.5 years ago, that's a pretty good set of metrics. It sometimes gets lost because it's inside of Goldman Sachs. But we're excited about what we've built thus far, and we think we now have a platform to keep going. And you'll see us continue to develop partnerships. Partnerships will be a way for us to broaden and deepen that platform, and we're attractive for partners. Goldman Sachs has a lot of corporate relationships. And we have attributes that make us attractive in the context of delivering banking as a capable complement to what other fintech companies in the world might want to be doing to reach their customers.

That's really interesting. And just one more for me, John, on the wealth management side. You bolstered your RIA offering. You did the acquisitions of United Capital and Folio. The RIA space, it's one that certainly benefited from strong secular growth tailwinds, but it's also very much a scale game. It's really dominated by a few small players like Schwab, Fidelity, Pershing. Do these acquisitions provide a strong enough platform where you can focus your efforts on scaling organically from here? And any KPIs that you can cite just validating some of the progress that you've seen within that channel?

Yes, sure. I appreciate the question, Steve. I mean, the RIA opportunity, we think, is really attractive. We obviously have a large-scale custodial platform now, which sometimes is lost in this conversation. We've got a large Private Wealth business. We've got a large Ayco business, which is really an executive counseling business focused on corporations. And we have a large prime business in our equity platform, which is an institutional-focused business. And so those are custody assets at the core that we have as a platform, but I'd call them more legacy custody platform assets. And what we think that is really interesting for Goldman Sachs is to start to think about the growth opportunity with a digital-first custody approach. And so Folio was our initial foray into trying to accelerate our strategy to be more of a custodian and buying capability and technology to deliver more of a digital-first tech forward approach. The notion here would be to take that digital-first tech forward approach and integrate it into what Goldman Sachs has to offer, not unlike what we're talking about with Marcus in transaction banking. So I participated in a handful of client pitches in the early days of our integration with Folio. And what's been interesting to me is the attractiveness to the client of the combination of, "Oh, you have digital API-driven custody capability. And you're developing that further and get access to the Goldman Sachs machinery, whether it's investment strategies, risk management, global presence, et cetera." And so the combination, we think is attractive. It's really early days. The KPIs I'm looking at are really client onboarding. It's not any more complicated than that. How many clients can we start to attract to this opportunity set, in terms of large-scale RIAs? And so it's really early, but we've had some early success, and we're feeling good about where we're going. And over time, we'll be able to talk more specifically about some of those KPIs, but we're really in the early innings as we stand here today.

And maybe just shifting gears to the transaction banking side. We've had a few questions come in, just trying to unpack what are some of your longer-term market share ambitions. So you had the $135 million revenue contribution. As you noted, since the launch actually happened midyear, that's quite an impressive outcome in year 1. You cited the longer-term ambitions, $50 billion of deposits, $1 billion revenue target over 5 years. Maybe just speak to your confidence in achieving those targets? And just given some of the early success, how has your thinking evolved around the potential market share capture opportunity over the long term?

Okay. I continue to be very excited about transaction banking. And one of the reasons I'm really excited about is I don't think it's a market share game, I think it's a very large market. We look at -- looked at it as an $80 billion market when we thought about it ahead of the Investor Day discussions that we had with all of you. That's a 2019 number, I think, in the U.S. It's obviously grown since then, but that's a large market. And as I said, it's pretty fragmented. So we don't need to really disrupt the market share dynamic in the marketplace much to build a business that you all would recognize at Goldman Sachs. So I don't think we need to be targeting a significant market share to make a lot of progress in the 5-year time frame we've talked about. So that's attractive on the one hand. On the other hand, we're seeing really good feedback from clients. And so again, if you said, what are the KPIs you're looking at? Number of clients on the platform is an important KPI. And here, we're further along than we are in the RIA ambition to your prior question. And so I said 225 clients as at the year-end 2020 mark. And obviously, it's grown from there. And that to me is a really good indicator that we're getting clients to come on the platform, deposit money on the platform and start to use the platform for their payments and give us an opportunity to prove that this platform is complementary to what they're already doing in terms of managing and navigating their payments. And one of the reasons why I think it's complementary is it's very digital. It offers a lot of analytical capability to really see on a dashboard exactly what's going on, tracking your payments, tracking your working capital, it plugs into your workstation, if you're a treasurer. So it's very easy to integrate into your treasury life, if you're a corporate treasurer, which we think is an important thing. And the user interface, is more what you'd expect in a consumer finance context. It has that sort of simple technology-first user interface. It's not clunky. It's much more modern and kind of user-friendly. What we have to do now is we have to operationalize those deposits. So we have $30-plus billion of deposits in the platform, but the vast majority of them are not yet fully operational. As we operationalize them, which really means that they start using the platform, they're not just held in a deposit account, but they're actually starting to perform and use as payment mechanisms around the world, that generates much more revenue and much more flow for Goldman Sachs, and we become more valuable to those clients when they start operationalizing them. That's where the value proposition becomes more interesting. So as we generate that operational migration, you'll start to see the revenue click up. So that's one major upside for us. The second major upside are these partnerships. Having the ability to aggregate more clients on the platform in partnership form where we have less of an ability on our own to go get those clients, where we bring a lot of attribute, but we don't have the entirety of the attribute, that is attractive for us. And so you're going to see us continue to push in that direction. We launched a partnership with Stripe, focused on their client base. That's an SME client base, that's not the traditional Goldman Sachs client base. And so that will be the second major area that you'll see us launch and focus on. And the third major area is really globally taking this business more global. So you'll see us be more active in Europe, in the U.K. and Japan, in 2021 and start to make this more of a global platform, which again, has the ability to broaden that TAM and increase our opportunity set.

That's great. And certainly no stronger endorsement in my mind than partnering with Stripe, so certainly congrats on that. Switching over to the third-party alternative side. At Investor Day, you talked about a 5-year plan of raising $150 billion on a gross basis across your alts platform. Year 1, you're tracking well ahead of that at $40 billion. Do you see that fundraising level of $40 billion as a sustainable goal or ambition? And how long before this business actually becomes a more meaningful contributor in terms of the P&L?

So this is an opportunity that we feel quite strongly fits squarely in the wheelhouse of what Goldman Sachs has done for quite a long time, which is to combine an investment banking engine of relationships and idea generation with corporations around the world and an investment capability that we've now had for over 30 years. So this is not -- we're not new to this game. This is the Goldman Sachs' Merchant Banking model that's been running for quite some time. But we ran this model with more of a balance sheet mindset for certainly the last period of our history, effectively after the financial crisis, in particular, where we've been running it with more of a balance sheet mindset. Our view is our balance sheet is a significant competitive advantage. The ability to seed funds, warehouse assets and use that balance sheet to launch strategies, we think, is a big advantage. But we want to run a more balanced business. So we talked about $150 billion of third-party fundraising, as you said and I said. We raised $40 billion, as you said, in 2020. That $40 billion came in a handful of places, most prominently, it came from something called the West Street Strategic Solutions Fund, which is a corporate credit recovery fund focused on giving liquidity and capital to corporations who are obviously struggling in the context of the pandemic, and we saw an opportunity to take advantage of our investing capability. And so that was a really big launch for us in 2020. In 2021, I think you can assume we're going to have a similar size of fundraising, but it will come in different flavors. It will be more distributed. We probably won't have a $14 billion or $15 billion fund, we'll have more strategies launched. So we're launching a growth equity fund, which we think we have a terrific growth equity platform. It's very global. It's very differentiated, and we're excited about that launch. We're launching -- we're in the market with a private equity fund. We're in the market soon with an impact fund, which will be a climate-focused fund that we're calling Goldman Sachs Horizon, which we think is going to be very squarely in the theme of climate transition. We'll have a real estate fund, several credit funds. And so we have a lot coming in 2021 in a broader, probably more distributed form than you saw in 2020, but I think you'll see a similar size of capital raising. And so you can see that we might be at $80 billion thereabouts of funds raised if we execute, as we think we will, at the end of 2021, which is more than halfway to the $150 billion 5-year target. So we feel really good about the direction of travel, but I don't want you to lock in on $40 billion as the annualized number because, as you know, this fundraising dynamic is not -- it's not static. It depends on what funds you're launching when and you have curves to the fundraising schedule, but we feel very, very good about the $150 billion. We have a lot going on with our clients. And the receptivity from the institutional client base has been exceptionally good. I think Goldman Sachs brings a lot of unique attributes to this equation. Our One Goldman Sachs mantra of becoming more of an adviser to the institutional community on alternatives more broadly is a unique thing that we think we bring to the table. We're building kind of a capital markets capability. For alternatives, much like we have a capital markets capability for equities or debt. Alternatives is a growing asset class. We think there's real secular growth. And having a thought leadership advisory-led model, where we bring the entirety of the firm to the client and help them understand what's happening in their alternatives portfolio. And by the way, bringing technology, more data science, more portfolio analytics, more risk analytics to help them think about what could go wrong with alternatives? What are the upsides of alternatives? How should we think about portfolio construction? That's going to be our approach to be an adviser. And obviously, if we do a good job with that, we will attract some of that capital to our platform, which will help us continue to grow and meet, if not exceed, those targets.

So John, it's really interesting. You talked about all the momentum you're seeing on the third-party side. And at the same time, simultaneously, maybe deemphasizing or reducing some of your exposure to the more capital-intensive investing side. One concern we do hear from investors is the risk that your planned dispositions of that more capital-intensive PE investments, it could leave you with a large revenue pocket once those portfolio sales are executed. I was hoping you could just clarify how your co-investing strategy is evolving? And barring any negative shocks to the market, which could impact the portfolio, how are you planning to mitigate any sort of revenue shortfall?

Sure. No, I appreciate the question. It's -- we get the question a lot, too. And I appreciate everybody's focus on that. It's the right focus. It's an intelligent focus. As I said, the balance sheet is a strategic asset for the firm. So we are going to use the balance sheet, driving more towards co-investments. So one of the things that's always been the case with Goldman Sachs is we eat a lot of our own cooking. So when we go out with our fund, we put a lot of the firm's capital and the partners' and employees' capital into the funds. That is a real asset to fundraising. You'll see the shift of that balance sheet more to credit from equity. So it will be less capital intensive. So we'll have less of that investing in equity because more of that equity investing will be in fund form, not in balance sheet form. So that mix shift will be capital efficient. That's an important point. You'll see us generate more management fees. So over time, the shift of revenues will be from more mark-to-market gains from balance sheet to more revenues from management fees. That takes time, but we're starting that journey and we're starting to see some good progress along that journey. We -- and then obviously, we're monetizing a lot off the balance sheet, which has been a good thing to be doing for lots of reasons to affect the strategy, but also it's been a pretty good market in which to sell assets at attractive prices. So we announced at the Investor Day that we would take $4 billion of capital out of the Asset Management business as we sell assets and remix, as I said, from equity into more credit and into more fund form. We sold over $4 billion of gross equity to date, which is about $2 billion of capital. So that's what we've affected to date. We're running ahead of plan at this point. We have a line of sight into an additional $3 billion of private equity sales, where we can see clear to getting $3 billion of incremental sales done off the balance sheet. And this quarter, we disposed of approximately $1 billion of public equity positions as we own positions and public equities that have appreciated, and we've taken advantage of the ability to monetize those positions. So we've been very active in selling assets off the balance sheet, taking advantage of the market opportunity and affecting this strategy. And as you'd imagine, the portfolio continues to appreciate. So the good news is our assets are being marked up and they're appreciating in sympathy with the markets. That partially offsets some of the harvesting impact, but I think that's a good thing to be having that as opposed to the opposite. But we still expect to achieve the $4 billion target ahead of our 5-year time frame. So we're really running ahead of where we thought we would be, and we have every expectation that we will achieve that $4 billion target ahead. And as to revenue air pocket, given that we are doing a lot of selling and we are generating a lot of revenue, in the context of that selling and in the context of healthy markets, we don't see any concerns on revenue air pocket, and we see the management fees growing over time, largely offsetting whatever revenue degradation there would be. And so at the moment, I wouldn't predict any revenue air pocket. We feel quite good about the transition that we're making in that regard.

And I know that we're close to running out of time. I've got quite a few questions on what's in -- certainly an incredibly popular topic, and we do have a panel on this later this afternoon, which is crypto. And with the price of crypto proxy surging and more traditional banks starting to enter the space, largely on the trust and custody side so far, what are your views on the crypto space? And just the usage of distributed ledger technology that you can potentially exploit?

Yes. Well, you're right. This is a hot topic, and I get the question all the time, as I know do you. Here's what I would say about this broadly, and I'll try to be crisp because I know we're late on time. We're big believers in digital money. We think the movement from legacy money to digital money, much like the movement in other aspects of the economy in the world, is accelerating. And I think the pandemic has been a significant accelerant to the already accelerating transition. So there's no question in our mind, there's going to be more digital commerce, a lot more, an explosion in digital commerce. And digital money will explode likewise. So we're believers in that movement. We also believe that the central banks are very, very focused on this because, obviously, in terms of money supply and monetary policy, this has potential implications over a long-term period. And so we're engaged and watching closely what the central banks are doing because we expect the central banks around the world to be participants and to be creating their own capabilities in this regard. And that will be an important component of how this all develops. And obviously, as a regulated bank and as a market participant, we're keenly focused on what the central banks will be doing. And as you'd imagine, very engaged in the dialogue with them. We think the blockchain technology is a really important development, and we think it has the potential for extremely attractive applicability broadly defined. You can imagine as we debate in the world how settlement periods can close, blockchain, distributed ledger capability is an interesting potential method for doing that. So we're believers that blockchain has real durability as a technology and as a way to continue to innovate in the marketplace. And we're obviously investing in that. So we've got a number of investments and a number of folks around the firm focusing on how this will evolve. And so as you'd imagine, we're watching it carefully and we're pretty actively engaged in it. On Bitcoin, specifically, it's interesting. We're getting a lot more questions from our clients on it. It's obviously an interesting prospective asset, potential store value. The client demand is rising. As a regulated bank, we are limited in what we can and can't do. So we could custody, but we can't principle Bitcoin as an example. So those distinctions maybe not as well understood, but that's something that we'll -- I'll have to navigate through. But I think Bitcoin is worth watching, and we continue to evaluate it real-time and listen to our clients and stay very engaged. And I think we're all going to learn a lot in the near-term on it.

That's great, John. And on that note, just wanted to extend my thanks for participating in our conference today. Clearly executing quite well on your Investor Day targets, so congrats on all the success. Let's hope, just onward and upward from here. And with that, our next panel is beginning in 2 minutes. It's bill.com. Thanks, everyone, for joining today. Have a great rest of your day.

Thanks, Steve.